The pound did however drop against the US dollar as investors looked to the relative safety of the US currency in the face of increasing doubt that a comprehensive solution will be reached on the debt crisis. Whilst sterling has been holding at €1.19/£1, €1.20/£1 is a key level of resistance that will require a large swing in sentiment to reach, but many analysts now expect sterling to push towards that in the coming months. Retail sales were better than expected on Thursday.

The euro has had a poor week, dropping to an 11-month low against the US dollar and a 10-month low against sterling. Last week's EU summit seemed to follow the normal pattern - a framework agreed on a solution, but discussions over the detail pushed back to a later date. Investors are becoming increasingly concerned that this lack of action means that policymakers are far from reaching a solution. Concern is mounting that we will begin to see the first stages of a euro break up in the coming months.

In the USA, stock markets have had a turbulent week as investors pull out of higher risk assets and into safer assets such as US government bonds. This flight to the safety of US bonds has also driven US dollar strength throughout the week, hitting a two-month high against sterling and an 11-month high against the euro.

Elsewhere, the Swiss franc strengthened after the Swiss National Bank chose not to change the pegged exchange rate against the euro. This saw currency strengthen after investors had widely expected the SNB to raise the rate to counter deflation in the country.

Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.